Sodimico
Encyclopedia
Sodimico is a state-owned mining company in the Democratic Republic of the Congo
(DRC).
Sodimico was a subsidiary of the giant state-owned Gecamines.
The primary focus was on gold mining.
In 1988 the Kinsenda mine was flooded, halting production for two years.
During the 1990s the company was badly affected by civil conflict and by the government's privatization policies. In many cases workers went unpaid for months.
During the Second Congo War
(1998-2003) and in the unrest that followed "peace", informal mining by artisans produced much of the copper and cobalt, exporting it illegally with the collusion of government officials. Private companies produced 85% of official output, with dysfunctional state companies such as Sodimico or Gecamines as passive minority partners.
MMK was dewatering the Kinsenda Mine
, which had one of the world's highest grades of copper ore at 5.1%.
It was estimated that the mine would produce 1.2 million tons of ore per year, giving 56,000 tons of copper.
Due to a Title Revisitation Process initiated by the DRC government, in February 2009, it was confirmed that the Musoshi Mine
would be returned by the South African miner Metorex
to Sodimico.
In March 2011 Prime Minister Adolphe Muzito
attempted to pay a visit to a Sodimico plant in the Sakania territory.
However, his route was blocked by miners protesting that they had not been paid for several years.
had illegally obtained the rights to its Frontier
and Lonshi
mines, previously owned by Sodimico.
According to First Quantum the ruling was due to FQM's decision to contest the expropriation of their Kolwezi tailings project
, which was later sold to the Kazakh mining company Eurasian Natural Resources Corporation
.
In August 2011 it was reported that Sodimico had sold its 30% share in the two mines for $30 million.
The estimated value of the mines was over $1.6 billion.
A document signed on 28 March 2011 laid out the agreement between Sodimico, Sandro resources Ltd and Garetto holdings Ltd.
When contacted later that month, the Mines Minister Martin Kabwelulu
denied that any sale had been carried out.
The Sodimico CEO Laurent Lambert Tshisola Kangoa refused to discuss the matter with reporters from Reuters
.
The next day it was reported that Kabwelulu had in fact ordered the sale of Sodimico's 30% stake in the Frontier and Lonshi mines to Fortune Ahead, a shell company registered in Hong Kong that already owned the other 70% of Sodifor, the holding company for the properties. Sodimico was transferring some of the proceeds to a fund to be used in the forthcoming elections.
In September 2011 the International Monetary Fund
asked for explanations from Sodimico and Gecamines
, another state owned mining company, of sales of assets below market value and without publicity. At the time, the IMF was providing loans to the DRC worth $561 million to improve the economy.
Democratic Republic of the Congo
The Democratic Republic of the Congo is a state located in Central Africa. It is the second largest country in Africa by area and the eleventh largest in the world...
(DRC).
Early years
Sodimico took over several mining properties from the Union Miniere du Katanga in 1967, when President Mobotu partially nationalized the Zaire economy.Sodimico was a subsidiary of the giant state-owned Gecamines.
The primary focus was on gold mining.
In 1988 the Kinsenda mine was flooded, halting production for two years.
During the 1990s the company was badly affected by civil conflict and by the government's privatization policies. In many cases workers went unpaid for months.
During the Second Congo War
Second Congo War
The Second Congo War, also known as Coltan War and the Great War of Africa, began in August 1998 in the Democratic Republic of the Congo , and officially ended in July 2003 when the Transitional Government of the Democratic Republic of the Congo took power; however, hostilities continue to this...
(1998-2003) and in the unrest that followed "peace", informal mining by artisans produced much of the copper and cobalt, exporting it illegally with the collusion of government officials. Private companies produced 85% of official output, with dysfunctional state companies such as Sodimico or Gecamines as passive minority partners.
Joint ventures
As of February 2007, Sodimico held 20% of Minière de Musoshi et Kinsenda (MMK), other shareholders being Copper Resources Corp (CRC) with 75% and Forrest Group wuth 5%.MMK was dewatering the Kinsenda Mine
Kinsenda Mine
The Kinsenda Mine is a copper mine that is being opened in Katanga Province, Democratic Republic of the Congo.It is located near the Zambian border town of Kasumbalesa....
, which had one of the world's highest grades of copper ore at 5.1%.
It was estimated that the mine would produce 1.2 million tons of ore per year, giving 56,000 tons of copper.
Due to a Title Revisitation Process initiated by the DRC government, in February 2009, it was confirmed that the Musoshi Mine
Musoshi Mine
The Musoshi Mine is an underground copper mine in the Katanga Province of the Democratic Republic of the Congo. The mineral rights are owned by the South African miner Metorex.-Resource:...
would be returned by the South African miner Metorex
Metorex
Metorex is a mining company based in Johannesburg, South Africa.It has assets in the Democratic Republic of the Congo , Zambia and elsewhere.A recent takeover bid by the Jinchuan Group of China valued the company at US$1.1 billion.-History:...
to Sodimico.
In March 2011 Prime Minister Adolphe Muzito
Adolphe Muzito
Adolphe Muzito is a Congolese politician who has been the Prime Minister of the Democratic Republic of the Congo since 2008. Muzito, a member of the Unified Lumumbist Party , was previously Minister of the Budget under Prime Minister Antoine Gizenga from 2007 to 2008.Muzito, who is from Gungu,...
attempted to pay a visit to a Sodimico plant in the Sakania territory.
However, his route was blocked by miners protesting that they had not been paid for several years.
Controversy
In May 2010 the DRC Supreme Court decided that the Canadian firm First Quantum MineralsFirst Quantum Minerals
First Quantum Minerals Ltd. is a Vancouver, British Columbia based mining and metals company whose principal activities include mineral exploration, development and mining....
had illegally obtained the rights to its Frontier
Frontier Mine, Katanga
Frontier Mine is a copper mine in Katanga Province, Democratic Republic of the Congo that was owned and operated by the Canadian Mining Company First Quantum Minerals...
and Lonshi
Lonshi Mine
Lonshi Mine is a copper mine in Katanga Province of the Democratic Republic of the Congo, to the southeast of Ndola, Zambia.-Operations:The mine produces high-grade oxide ore that was transported to Zambia for processing at the SX/EW facility in Bwana....
mines, previously owned by Sodimico.
According to First Quantum the ruling was due to FQM's decision to contest the expropriation of their Kolwezi tailings project
Kolwezi tailings project
The Kolwezi tailings project is a major project in the Kolwezi mining area of the Democratic Republic of the Congo to recover copper from the tailings, or processed ore, from mining in the region since the 1950s....
, which was later sold to the Kazakh mining company Eurasian Natural Resources Corporation
Eurasian Natural Resources Corporation
Eurasian Natural Resources Corporation PLC is a diversified natural resources company headquartered in London, United Kingdom. It has activities in mining, processing, energy, logistics and marketing....
.
In August 2011 it was reported that Sodimico had sold its 30% share in the two mines for $30 million.
The estimated value of the mines was over $1.6 billion.
A document signed on 28 March 2011 laid out the agreement between Sodimico, Sandro resources Ltd and Garetto holdings Ltd.
When contacted later that month, the Mines Minister Martin Kabwelulu
Martin Kabwelulu
Martin Kabwelulu Labilo is a politician in the Democratic Republic of the Congo.He is a member of the Parti Lumumbiste Unifié .He was appointed Minister of Mines on 5 February 2007 in the government led by Antoine Gizenga, and retained this post through the reshuffle of 25 November 2007.Martin...
denied that any sale had been carried out.
The Sodimico CEO Laurent Lambert Tshisola Kangoa refused to discuss the matter with reporters from Reuters
Reuters
Reuters is a news agency headquartered in New York City. Until 2008 the Reuters news agency formed part of a British independent company, Reuters Group plc, which was also a provider of financial market data...
.
The next day it was reported that Kabwelulu had in fact ordered the sale of Sodimico's 30% stake in the Frontier and Lonshi mines to Fortune Ahead, a shell company registered in Hong Kong that already owned the other 70% of Sodifor, the holding company for the properties. Sodimico was transferring some of the proceeds to a fund to be used in the forthcoming elections.
In September 2011 the International Monetary Fund
International Monetary Fund
The International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...
asked for explanations from Sodimico and Gecamines
Gécamines
Gécamines, or La Générale des Carrières et des Mines, is a state-owned mining company in the Democratic Republic of Congo . Its principal products are copper , cobalt and zinc...
, another state owned mining company, of sales of assets below market value and without publicity. At the time, the IMF was providing loans to the DRC worth $561 million to improve the economy.